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November 18, 2013

Retirement Advice: How is Retirement Different?

First posted nearly two years ago, these results are still intriguing and important to understand.

A study was released by OnLineMBA.com that makes for fascinating reading. We tend to assume retirement is the same for everyone. But, as this study makes clear, there are substantial differences around the world in what makes for a satisfying retirement. Here are some of the highlights.* We tend to think retirement has been around forever, but that is not true. When America and other countries were primarily agrarian, there was no such concept. Farmers didn't stop working. Likewise, unless a small business owner sold his operation and lived off the profits, most urban folks worked until too sick or old to continue. Then, family members supported them for the rest of their lives. Today a more formalized concept of retirement is a reality in most industrialized nations. But, what it means varies widely. * In the U.S. 65 has long been the standard retirement age. Many other countries also settled on that age, too. But that is changing in response to budget issues and increased life spans. In Mexico the average person retires at 73. On the other end of the scale, the average Frenchman hangs up his or her work clothes around 59. The typical resident of Austria, Luxembourg, and the Slovak Republic also retire at a young age, while those in Japan and Iceland wait until their late 60's. Koreans average 71 as the time to stop their employment.
* Interestingly, the vast majority of those in a worldwide survey said they wanted to keep working well into their later years and didn’t feel that mandatory retirement was fair (80%). On the other hand younger people attempting to start their careers often complain of the older employees blocking their upward path. Initially retirement was often a product of government efforts to move older workers out of the workforce in order to free up jobs for the next generation. Suddenly that is not happening nearly as frequently.
* As several posts on this blog have noted, retirement may mean quitting one career just to start another. Many of those surveyed in the U.S., Japan, and Mexico see retirement as a chance to pursue a lifelong business dream or to gain additional financial stability. Risk-taking might be a habit of the young, but older people in America are no stranger to it. Whether it’s because they have the experience or the finances at hand, more and more older adults are starting businesses. * For many, entrepreneurship might be setting them up for a different, more flexible work situation in retirement. For others, starting a business is simply a lifelong dream they want to fulfill before they’re too old to handle the stresses it might bring. Interestingly. a 2007 study actually found that around the world more older adults were providing support to relatives than were receiving it. That requires more money than may have originally been saved.

* Retirees in China, Hong Kong, and Brazil are more likely to value slowing down and resting in their retirement lifestyle than those from many other nations. Those folks are more likely to want to live off their their savings and investment money, spend more time with family, or simply slow down and enjoy life.
* In the U.S. there are lots places where retirees will have no problem finding other folks in similar situation. A whopping 19% of Florida's population is older than retirement age. That should come as no surprise, as the state is widely known for its large number of retirement communities. What may come as news is the state in second place: Pennsylvania. The Keystone state's population over 65 is 16%. Overall winner in this regard is Japan, where a full 22% of the population is 65+. Not surprisingly, the world is graying at a rapid pace. By 2050 it is projected that seniors will outnumber children 14 and under for the first time in history. Over 2 billion of the world's citizens will be at least 65 years of age.
* Due to longer life spans and some pretty serious budgetary problems, nations around the world are attempting to raise the official retirement age when pensions can be collected. For those born after 1959 America has set 67 as the "full retirement age" to collect Social Security (not counting those who hold off until 70 to get higher benefits or those who start at 62 at a 30% discount). France had riots on its hands while trying to increase the age to 62 within the next 6 years. Great Britain has talked about the need to raise their official age from 65.
In contrast to the perception many hold about retirees, Satisfying Retirement holds as its central premise that we want to do whatever is required to help us stay happy and healthy. That may mean working later in life, it may not. Importantly, we should have that choice.

6 comments:

I agree, we should have the choice, too. Unlike many of my father-in-law's contemporaries, (tho there aren't many left at 95 yrs. old), I think boomers want to continue contributing in some way. I have no desire to lay around and play golf, or shuffleboard, for the next 20+ (God willing) years. So many of our generation have much to contribute, teach and share, with younger people. Why waste that deep well of knowledge?b

My dad's generation was as you note for your father-in-law: work to 65 and retire to either Florida or Arizona and do as little as possible. Everyone I know would go nuts with that routine.

I wonder about countries like France where 59 is the current retirement age. With a full blown social net to handle virtually every health or community need I wonder how they stay motivated and productive.

It's interesting, Germany has the same thing and I never thought of it as a problem. Perhaps because people generally work a maximum of thirty five hours a week and have a month to six weeks of vacation throughout their lives, and have lots of holidays nad every thing is closed Sunday. So while they may not "volunteer" in our traditional sense they almost always have other things in their lives prior to retirement. While they may not be able to volunteer in terms of feeding the homeless they are lots of other community things they do. Also, i general, there are probably more seniors living near extended family.

Once again, one's answer depends on how one defines "retirement" and when one retires. Stopping paid employment doesn't mean you have to shrink from the world in other ways. Among many factors to consider is expected longevity and quality of life (QOL) post-employment. Finances affect QOL but only to a point. Remember also that cms.gov has published stats which indicate that 70% of people over the age of 65 have at least one chronic illness. So, retiring earlier may impact what you can do or want to do in retirement. I found an interesting website that also makes a rough estimate of each individual's longevity (and combines this information with information about when to take social security).

True to my French heritage, I retired at 59. My mother, however, was still working, by her choice, until shortly before she died at 82. One thing you have stressed on your blog is that retirement is not a one-size-fits-all scenario. It's interesting, isn't it, to learn how the concept of retirement varies, not only from person to person, but from culture to culture, and from generation to generation.

I agree Galen. Reading all the retirement blogs, that is opposite. Some folks have to be doing. Some folks have to be physically going all the time. some folks have to have a fully planned day. Then there are those of us who are putterers as best for much of the time. I have a small business and I volunteer, but much of my time is spent doing the little things-reading a book, playing with the dogs. Of course now since my roommate works and I do not, I've kinda sorta become the house person again.

Bob Lowry is the author of the definitive retirement guides: Living A Satisfying Retirement and Building A Satisfying Retirement.Bob has been profiled in Money Magazine & CNN Money as well as Ad Age Insight White Papers. He is a featured author in nationally released book, "65 Things To Do When You Retire," "65 Things To Do When You Retire - Travel," and "70 Things To Do When You Turn 70," as well as an original contributor to PBS's Next Avenue web site.